Posted on 06/03/2013 4:42:55 AM PDT by Kaslin
Just a few blocks away from Nationals Park the federal government holds a below-market lease at 2100 2nd Street, SW, Washington D.C.
The 600,000 square foot lease doesn’t expire until May 15, 2018 and is valued at least $48 million in rent and likely represents another $40 million in savings below market rates for commercial real estate.
But, in a time of tight budgets, when taxes have been raised on all Americans to support Washington’s addiction to spending, bureaucrats at the General Services Administration (GSA) have decided to…wait… abandon the cost-effective space, move the employees to a new, higher rent building and pay rent on the vacated building; at the cost to taxpayers of at least $250 million according to sources familiar with the terms of the lease.
And we wonder why the government has such a tough time cutting their budget while having such an easy cutting our household budgets through taxes?
Sources close to Capitol Hill, however, say there is growing outrage over this specific illustration of the waste of more than $250 million taxpayer dollars.
“The GSA is making a major mistake by neglecting to take advantage of existing below market lease rates for an extended term. It is outrageous that they simply seem to be ignoring a significant cost savings to the taxpayer,” said a source close to Congress. “This is a time we all need to be exercising prudent fiscal responsibility, a basic responsibility of the GSA. They have dropped the ball and had better pick it up soon”.
I guess that’s the reason why the GSA has suddenly gone all “Eric Holder” on Congress, testifying to the House subcommittee responsible for the oversight of federal real estate that the broken lease won’t cost taxpayers a dime, when in fact the opposite seems true.
From the Washington Business Journal:
The federal government will be on the hook for at least $30 million in lease payments for the Coast Guard's current Buzzard Point headquarters after the agency moves to St. Elizabeths later this year, according to sources familiar with terms of the agency's lease with Monday Properties Inc.
That would contradict congressional testimony from Dorothy Robyn, public buildings service commissioner for the General Services Administration, who told a House subcommittee May 22 that the federal government has an early termination clause with Monday and will not owe any rent.
Sources say the Coast Guard is allowed to terminate its Buzzard Point lease in May 2015, meaning the government would have to pay the lease term until then. There remains disagreement over how much that exposure would be: Some sources say it would be $30 million, while others say it will be as high as $60 million.
That’s not just Contempt of Congress- or even perjury- that’s Contempt of Common Sense, Taxpayers, Economics and, most likely, at least a minor violation of Einstein’s concept of space-time.
Negotiated in 2008, the lease is estimated to save the government at least $14 per square foot in a real estate market that often fetches $50 per square foot for commercial property. For all intents and purposes, the lease is a shrewd one to hold at a time that the government is trying to save a few dollars.
“Not only is the remaining 18 months of vacant/wasted space a problem,” said a person familiar with the lease, “but also that GSA foolishly terminated early a major federal asset that it had for years into the future – very cheap space that is perfectly well suited for numerous federal requirements. This is possibly the most foolish of all GSA blunders, and hurts the taxpayers the most.”
The government could save a lot of taxpayer dollars if it continued to occupy the building including:
· $60 million in lease liability in an unoccupied building
· $40 million they already spent in infrastructure improvements
· $140-280 million in savings by extending the terms already negotiated at below market rates.
Because of the below-market deal negotiated in 2008, instead of moving out, the government should be moving more people in.
I know we see this type of government waste every day – but hundreds of millions of dollars are going to be wasted by keeping this building unoccupied – an outrage for sure.
But unlike a lot of other government outrages, this one can still be remedied.
Congress? Can you hear us?
Because someone has been taking “Eric Holder” lessons from you.
Didn’t see any reference regarding who owns the destination property.
“Didn’t see any reference regarding who owns the destination property.”
That was my thought also. The people who would investigate the answer are all reporting to Obama, so it won’t happen before January 20, 2017.
Institutionalized corruption. The question to ask is what Dem donor happens to own the newly leased building.
The Democrats’ practice of Crony Capitalism and enrichment of political donors continues apace. If it cost the taxpayer $100 million to enrich a donor $2 million, the Democrats are “all in”.
The American people are blind or corrupted by the few table scraps thrown their way.
superiors of the USPS move a couple of blocks to a bigger house, guess who picks up the bill...WE DO. No wonder it is going broke too. And each of those new stamps cost upwards of a cool Mill to make the dies for.
Scandal a day!
LLS
DEFUND, DEFUND, DEFUND......
Lest we forget, that not only is GSA wasting money, in their workings with USPS here is the following little ditty, picked up by several services and blasted by Mark Levine:
Diane Feinstein’s husband, one Robert Blum (he of the various consortiums including Chinese arms deals, while Difi tries to ban firearms to citizens), controlling stock interest in CBRE who has the contract to manage postal facility and land parcel sales (some at unbelievably high amounts, others not so much, more like sweetheart deals in midtown of small America). Levine wondered how that contract was let... to a single bidder? And, the largest comm. real estate outfit in the world? Cute.
http://www.uspspropertiesforsale.com/default.asp.pg-AboutCBRE
http://en.wikipedia.org/wiki/CBRE_Group
Blum Capital has or had controlling stock interest in CBRE. You will recall that Blum Capital underwrote the sale by Vivendi Intl. in 2004 of Newsworld International, to create CurrentTV which is now Algorezeera USA. So they are thick as fleas. Hey, it’s all capitalism right? Crony to the max. Our nickel. New day, same tune— Hope and Change.
CBRE has 37K employees worldwide, and CEO is former Tramell Crow dude in Dallas.
Sorry, coffee. Pissed.
Go elsewhere on the site and look at the properties the choice ones already gone and no disclosure of contract.
Really sad is the Gulfport, MS main downtown PO building, built in 1910— classic building, marble, limestone, spanish. And...maybe expensive to re-design/re-use.
Main point is the “strange” way in which CBRE got this— which Mark went into greater detail about. Feinstein and Blum— a typical rip-off liberal pair from SF. Oh so proper and oh so lying a-holes, with their homobobo pals on the “inside” of every little crummy deal. The gay mafia- on the ground for the obamamau trough. And the GSA, corrupt as well...right there with IRS. It is how the money gets concentrated up the food chain to Washington central. This is how it happens— with OUR money. Deo Vindice.
-— Feinstein and Blum— a typical rip-off liberal pair from SF. ——
These two should remember death and God’s justice, especially at their ages. They’re drunk on power.
What are they going to do with the money? Buy another mansion?
I wouldn’t be surprised to see Diane Fineswine’s hubby involved in this...
Oops, I guess I should have read all of the posts.
Mr and Mrs Feinstein do love them some govt contracts
Truly. But being of a different non-Christian persuasion (not that there’s anything wrong with that, LOL), if they ARE of any practicing persuasion (orthodox, NOT) or atheists at best (statists and venture socialists) they could not care less about an “afterlife”.
At the risk of verging on “occupy” anti-jewish attitude, this behaviour is representative of all of the historical robber barons of the past, using OUR money to line their pockets (this line up being the federal properties game— and it is being done by others with large land tracts and the Natl Park Service— seriously, there is huge tax advantages to the “donation with control” intermediaries like Nature Conservancy etc.)
BTW, Thomas Aquinas a fave— celebrated in all the major communions, Episcopal, Catholic and Lutheran. Christians.
But... atheists “don’t have no songs” Enjoy from brother Steve Martin:
http://www.youtube.com/watch?v=7KMQ_7OFtiY
What do they care? It’s not their money.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.